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Peak performance: US M&A in 2018

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2018 was a strong year for dealmaking in the US, particularly domestically, but when will the tide turn?

US M&A weathers geopolitical storms

The political and economic backdrop may be unstable, but 2018 was a strong year for US M&A, especially domestically. However, a strong stock market cannot last forever, nor can a booming M&A market

US M&A enjoyed yet another busy 12 months in 2018. Deal value climbed by 15 percent and the domestic M&A market thrived. Overall domestic deal value was up 23 percent compared to 2017, and the ten largest deals of the year were all domestic transactions.

Steady economic growth, low unemployment and interest rates, and the billions of dollars released through the Trump tax cuts all boosted domestic dealmaking. In a survey of 200 M&A executives conducted for this report, more than three quarters see the US as the most attractive M&A market in 2019, and 80 percent expect the US economy to continue expanding over the next year.

But while there is plenty of reason to be optimistic, the positive deal and economic figures can obscure growing concerns that the cycle may be close to its peak. Stock markets have been more volatile this year and businesses are worried about the impact of the Trump administration’s actions.

More than half of respondents to the survey expressed their opposition to new laws that give the Committee on Foreign Investment in the United States (CFIUS) more powers to block inbound deals, and a third say they are worried about what escalating trade tensions between the US and China mean for their prospects. In what is supposed to be a strong seller’s market, the fact that close to a third of those we surveyed have suffered lapsed deals is further cause for caution.

As we go into 2019, there will be much for dealmakers to look forward to. Technology continues to transform the way businesses operate and will remain a reason to transact. The economy is still in good shape too, which will sustain confidence.

Dealmakers will not feel the need to sit on their hands just yet but will need to approach prospective deals with a degree of caution over the next 12 months to mitigate against the inevitable recession and stock market pullback.


Confidence, cash and tax cuts: The US M&A landscape in 2018

The US M&A market delivered another year of strong performance in 2018.

Private equity remains strong in 2018

Private equity buyout activity saw an increase in 2018, with volume rising 6 percent to 1,361 deals and value up 7 percent to US$214 billion.

US M&A survey: Deal drivers and dilemmas

We surveyed 200 executives on their views about the future of M&A and found that most remain optimistic about 2019

Sector watch

Sectors overview: Tech and energy top the charts

TMT and energy were the top two sectors by value; fintech is poised to invigorate dealmaking in the financial services sector.

Technology M&A value soars in 2018

After a period of frenetic dealmaking in technology over the last few years, which saw businesses across all industries scramble to adjust to the rapid shifts driven by digitalization, 2018 has seen value climb in the tech M&A sector

Consumer deals slip as digital disrupts

Digital disruption and its impact on physical retailers once again weighed on the consumer sector in 2018. Consumer M&A volume was down 13 percent year-on-year to 465 deals in 2018. Value decreased 28 percent to US$119 billion

Financial services deals are down, but 2019 brings hope

Financial services sector M&A volume decreased by 6 percent to 461 deals in 2018, with value decreasing 48 percent to US$80.2 billion. But there are signs that the sector’s M&A market is moving in the right direction going into 2019

Stability in early 2018 fuels oil and gas M&A

A stable oil price (for the majority of 2018) saw deal value climb in the energy, mining and utilities sector in 2018, despite volume falling

Real estate rises higher on megadeal surge

Real estate M&A value jumped 116 percent to US$74.9 billion in 2018, with deal volume staying flat at 46 deals

Next big thing drives healthcare M&A

Although deal volume and value in the pharma, medical and biotech sector fell in 2018, down by 3 percent to 580 deals and 27 percent to US$111.8 billion respectively, pharma companies have invested aggressively in strategic deals throughout the year

In Focus

Deal-changing decisions from Delaware

In the second half of 2018, the Delaware courts once again produced decisions that will guide M&A transactions in the future

Why, how and when should directors engage with shareholders?

Activism among investors is on the rise across the globe. Companies that empower directors to engage with shareholders can optimize investor relations, if they follow some simple but important guidelines


Four trends moving the US M&A needle in 2019

In 2018, the US M&A market has seen marked robust domestic activity and a strong tech sector but declining inbound dealmaking. We examine the four key factors that could characterize 2019

Meet our Partners

Global M&A Leaders

John Reiss

John Reiss
Partner, New York


Gregory Pryor

Gregory Pryor
Partner, New York


Allan Taylor

Darragh Byrne
Partner, Frankfurt, Stockholm


Allan Taylor

Allan Taylor
Partner, London


John Cunningham

John Cunningham
Partner, London


Alexandre Ippolito

Alexandre Ippolito
Partner, Paris


Christopher Kelly

Christopher Kelly
Partner, Hong Kong


 Barrye Wall

Barrye Wall
Partner, Singapore



Next big thing drives healthcare M&A

Although deal volume and value in the pharma, medical and biotech sector fell in 2018, down by 3 percent to 580 deals and 27 percent to US$111.8 billion respectively, pharma companies have invested aggressively in strategic deals throughout the year

2 min read

Companies are under pressure to renew pipelines as drugs go off patent and to keep pace with new treatment technologies. Companies in the sector have also encountered a squeeze on pricing, with the Trump administration pressuring the industry to keep prices down. In May, the President put forward proposals obliging firms to list prices in advertisements and took a tough stance against companies trying to delay drugs coming off patent.


Percentage decrease in deal value compared to 2017


Buying drug pipelines

In response to these challenges, pharma groups continue to use M&A to add new drugs and technology to their portfolios and stay on top of costs.

For the pharma industry, it is imperative to continuously regenerate product pipelines, as a way for companies to protect themselves against competition and generics. Specialty drugs, gene-based drugs and interventional medicines are especially difficult to develop, and therefore make attractive M&A targets.

French group Sanofi, for example, paid US$10.9 billion for Bioverativ, a haemophilia specialist, to increase its presence in the rare diseases market. Novartis added AveXis, a gene therapy business focused on rare and life-threatening neurological genetic diseases, to its portfolio in a US$7.4 billion deal, and GlaxoSmithKline announced it would acquire oncology-focused biotech Tesaro for US$5.1 billion.

This appetite for gene-based and specialty therapeutics is continuing. In the first few weeks of 2019, Eli Lilly announced the US$7.1 billion acquisition of Loxo Oncology, which develops drugs for genetically defined cancers.

Nor was this the only significant healthcare deal so far in 2019. On the third day of the year, Bristol-Myers announced it would acquire biopharmaceutical company Celgene for US$89.5 billion. The two companies have complementary portfolios and the deal would expand a number of Bristol-Myers’s assets and ensure another healthy year for healthcare M&A.


Contract research organizations consolidate

The contract research organization (CRO) provider space has also performed strongly, as pharma companies increasingly outsource complex protocols for drug development and approval to third-party experts. This has encouraged consolidation, as CROs seek scale to serve a global customer base across a range of treatment areas. Charles River Laboratories, for example, has moved to strengthen its offering with the acquisition of MPI Research for US$800 million.

Healthcare companies are streamlining processes as much as possible and looking to refocus on their core businesses and products.

Top healthcare deals
FY 2018

1: Sanofi acquires Bioverativ for US$10.9 billion

2: Kohlberg Kravis Roberts acquires Envision Healthcare for US$9.4 billion

3: Celgene acquires Juno Therapeutics, Inc. (90.37 percent Stake) for US$8.8 billion



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